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Housing developer got $575,000 in taxpayer-backed loans for Pamelia project that town council rejects

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A developer acquired taxpayer-backed loan commitments totalling $575,000 this fall for a subdivision that calls for 53 single-family houses in the town of Pamelia. But those loans may never materialize — the Town Council recently rejected the infrastructure design for the project, even though it was approved by the state Department of Environmental Conservation and state Department of Health.

Town Supervisor Lawrence C. Longway always has been opposed to the infrastructure plan submitted by GJ Construction Development for its Emerald Acres project situated next to the Willowbrook Golf Club on 5.5 acres at the northeast corner of Graham Road and Route 37. But because the Planning Board approved a conceptual design for the project in October 2010, developers Guy H. Javarone and his son, Gaetano H., were convinced they had the approvals needed to start the project.

They secured loans from the Jefferson County Local Development Corp. for $275,000 and Development Authority of the North Country for $300,000, which are contingent on building 19 houses for the project’s first phase. The remaining 34 units would be built by summer 2014.

To meet the public agencies’ requirements, the Javarones showed they had several approvals needed for the project: the Planning Board approved a conceptual design for the project in October of 2010, building permits were acquired from the town zoning officer and the infrastructure design was approved by the state DOH and DEC.

But the Town Council informed the developer this winter — after the loans were secured — that it won’t accept the infrastructure designs. In December, Pamelia sent a letter to the state DOH rejecting the infrastructure plan. The letter stated the town would only approve the project if the infrastructure is privately owned and managed by the developer.

It was an unexpected move that hoodwinked the Javarones. In April 2011, a Supreme Court judge ruled the Town Council doesn’t have the authority to interfere with the Planning Board’s approval granted in 2010 for the project.

“The DEC and DOH approved our design, but they also want to make sure the town accepts it,” Mr. Javarone said. “The town said that we need to have a privately owned sewer system to do it. But you can’t have a private sewer system in a public water district — it’s not done in the state of New York. I have these departments saying there’s nothing wrong with our infrastructure design and, as far as I’m concerned, Mr. Longway can’t trump these agencies.”

On Jan. 15, Town Engineer Kris D. Dimmick sent a letter to the Javarones stating infrastructure changes are needed for the town to approve the project. But Mr. Javarone said the town hasn’t specified what infrastructure changes need to be made. He said the issue is now in the hands of attorneys from both sides. Mr. Longway has recused himself from communicating directly with the Javarones since 2011, when they filed a lawsuit against the town.

Planning Board Chairman Harry E. Potter said that when the board approved the project in 2010, it only approved a conceptual design because the developer didn’t have any infrastructure plans at the time.

“The Planning Board approved a conceptual plan on how the homes were distributed on the parcel,” he said. “But it was without the infrastructure. The water, sewer mains and roadways were left to the DEC, DOH and town board to take care of.”

Mr. Longway, who is an independent housing developer, said the Town Council was dissatisfied with the design of the infrastructure plans when the developer presented them in the spring of 2011. The water and sewer valves on pipes, for example, were located underneath roads where they would be challenging for workers to repair. And there wasn’t sufficient space for workers to repair plumbing lines.

“We wanted all of the valving underneath dirt because it’s more accessible and easier to fix, and we didn’t like it underneath blacktop and concrete,” Mr. Longway said. Javarone “said he wouldn’t change it, so we told him you can build the infrastructure the way you want if you own it. We could have one meter on the end of the street and let him own the infrastructure. But he didn’t want that, either.”

Meanwhile, Mr. Javarone said, time is of the essence for the developer to reach an agreement with the town. When it acquired project loans, the developer told public agencies it would break ground in the spring and finish by June.

“I wouldn’t have signed off on these loans if I knew there was an issue with the town taking the project,” he said. “It sure feels like the town is against it. We’ve gone to the board two times to get the road names approved, and we couldn’t even get a response from the supervisor or board members.”

If the developer takes too long to make amends with the town, JCLDC and DANC can rescind their loan commitments. Because they are permanent financing agreements, the loans won’t be issued to the developer until it finishes building a significant number of the 19 houses for the first phase.

The developer “had some minor issues with the project. It was our understanding at the time that everything would be taken care of,” said Michelle L. Capone, director of regional development for DANC. “If this delay goes on, it would come to a point where we would review the loan application again. At this point, we’re still expecting a spring groundbreaking.”

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